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October 29, 2018

What Should IBM Do With Red Hat?

A: I don’t think it particularly does. Not by itself. It’s very late for IBM to be trying something like this with one big fat caveat and that is that IBM strive to dominate the mid-market. That is to say that everything IBM has ever done with AS/400 has to die, right now, at IBM’s command. They need to stop supporting that operating system and make RHEL run on all IBM iron.

Then they need to reorient itself in the market and stop trying to make money on high end hardware until they can price it like clouds. In other words, they need to be able to sell two big IBM mainframes that run in a skanky environment and say that it can run 1000 containers simultaneously. That way you don’t have to go to the cloud until you outgrow that - and that path would be seamless. IBM mainframes therefore have to be drop dead rugged and shipped overnight in a container to any location with enough electricity. That’s attractive. That’s something nobody else will do. And that’s something that can be facilitated by a company the size of IBM. Why? Because IBM will finance the whole thing.

What IBM must do, in the end, is beat Salesforce.com. If it cannot beat Salesforce, then it has no business in the cloud. Because it cannot and will not beat AWS, GCP or Azure. IBM needs to master the downmarket as I said before[1].

Everything IBM must do with RedHat is make RHEL administrators and software devs feel like they have an inside track to a comprehensive set of cloud management APIs that give them a reason to stick with IBM for 5 years. That means whatever the IBM cloud looks like today, it had better port over to RHEL in short order and the RedHat people need to be really excited about that.

I don’t think IBM management is so courageous, and I do believe that the RedHat people are just going to be very happy with their stock premiums. I’d bet the best of them are ready to ride off into the sunset and that this purchase is their last hurrah. The alternative is that IBM provide an exciting vision that encompasses cloud, mid-market, devOps and big rugged IBM hardware.

IBM vision? Let’s wait and see, but if I see another animation of an MRI brain scan coming from IBM marketing, I’ll know they’ve run out of ideas.